Tag: american

It is not hard to understand why the reaction can verge on the hysterical: Bogle’s insight strikes at the heart of the Wall Street belief that human beings can produce the financial genius to triumph over the average. When compared to other major American success stories, in fact, it is far from radical. If Walmart and Amazon and McDonald’s are “American,” why not Vanguard, or are they all “un-American?” To name just a few: low worker wages, traditional industries being wiped off the American ma

The index fund’s truest sign of success may be that it so riled Wall Street power brokers that at their worst they have taken to calling it “un-American”, even “worse than marxism.”

It is not hard to understand why the reaction can verge on the hysterical: Bogle’s insight strikes at the heart of the Wall Street belief that human beings can produce the financial genius to triumph over the average. But the Bogle success template is not wholly unique. When compared to other major American success stories, in fact, it is far from radical. It is part of a trend. Many of the most successful companies in the past half century of American capitalism were founded on delivering an average product to a consumer at a price point that was reasonable: think Amazon, Walmart or McDonald’s, which many of those active stock pickers on Wall Street have sung the praises of time and time again. If Walmart and Amazon and McDonald’s are “American,” why not Vanguard, or are they all “un-American?”

There are major downsides to these examples of accepting less as the key to excellence. To name just a few: low worker wages, traditional industries being wiped off the American map, and declining health standards. It may even be fair to ask whether successes like Walmart and McDonald’s are leading indicators of American decline rather than capitalism’s ability to transcend it. There is a way to look at the index fund’s domination that considers decline. It may be no coincidence that the index fund rose at the time it did.

Over the 20 years from 1980 to 1999, the S&P 500 compounded at an annual rate of 17.7 percent, according to markets analysis firm DataTrek Research. Over the 20 years from 1999 to 2018, the S&P only compounded at an annual rate of 5.6 percent. Paying an active manager 1 percent to 2 percent a year over the past two decade would have cut returns by 18 percent to 36 percent, DataTrek Research noted this week in a note analyzing Bogle’s impact.

“The upshot here is that indexing didn’t damage the active management business (as critics often claim) as much as structurally lower US equity returns pushed asset owners to lower cost solutions like index funds. Mr. Bogle and other indexers caught this wave beautifully, but they did not create it,” DataTrek wrote.

Vanguard Group has been among the most vocal asset managers telling investors in recent years to expect a world of low returns.

The big returns have left the public stock market for the world of private equity, where they are available only to the largest institutions. During this same period, housing has become more unaffordable for many Americans, rising college costs have led student loans to become the second-largest source of debt in the country, and health care costs are among the reasons that retirees are told to downsize and live on less if they want to have a “successful” retirement.

The defined benefit pension plans that guaranteed an income in retirement and were once a standard part of worker benefits in the private sector are virtually extinct. You can now make an argument that the most important innovation in the history of retirement investing wasn’t even the index fund, but automatic enrollment in employer 401(k) plans rather than leaving it up the individual. Most Americans are now on their own when it comes to long-term investing.

Shares of Netflix fell as much as 5 percent in after hours trading based on their mixed earnings released Thursday. Fourth-quarter earnings were 30 cents per share which beat analyst’s estimates by 6 cents. Quarterly revenue missed at $4.19 billion vs. the $4.21 billion estimated by Wall Street. Netflix added 1.53 million paid subscribers in the US and 7.31 million abroad, beating Wall Street estimates.

Earlier this week, Netflix shares gained 7 percent during a single session after announcing they would increase monthly subscription costs across its streaming plans.

Shares of American Express fell as much as 4 percent after the bell Thursday after missing on the top and bottom lines. The company posted $10.47 billion of revenue, slightly lower than Wall Street’s estimate of $10.56 billion. They reported $1.74 per share, which missed estimates by 6 cents.

Atlassian shares rose more than 10 percent after the bell Thursday based on better-than-expected earnings. The software provider earned 25 cents per share vs. the 21 cents estimated by Wall Street. They earned $299 million in revenue, slightly beating analyst’s $288.3 million estimates.

Shares of J.B. Hunt jumped over 6 percent after hours upon the release of its fourth quarter financial results. The trucking company posted $2.32 billion in revenue, slightly higher the estimated $2.30 billion.

Shares of Tyson Foods rose after hours following a report that the U.S. and China are in talks to reopen China’s market to American chicken exports. Companies like Tyson, Sanderson Farms, and Pilgrim’s Pride could all benefit from the hundreds of millions in annual sales they could earn with the reopened chicken market. The ban was initiated in response to the U.S. avian flu outbreak in 2015.

American Express reported fourth-quarter revenue that narrowly missed analysts’ expectations on Thursday, and an earnings profit after reporting a loss for the same period a year ago. Here’s how the company did compared to what Wall Street expected:Earnings : $1.74 adjusted earnings per share vs. estimates of $1.80 cents per share forecast by Refinitiv. : $1.74 adjusted earnings per share vs. estimates of $1.80 cents per share forecast by Refinitiv. The comparable earnings amount, which excludes

American Express brought in $10.47 billion in revenue for the fourth quarter of 2018, an 8 percent rise from a year earlier, according to the company. Still, the number was below the $10.56 billion expected by Wall Street.

“This was the sixth consecutive quarter with revenue growth of at least 8 percent, and it was driven again by higher Card Member spending, loans and card fees,” Stephen J. Squeri, American Express chairman and CEO said in a press release.

American Express issued an upbeat forecast for 2019.

Its full-year revenue guidance for growth was between 8 and 10 percent, versus Wall Street’s expectations of 7.5 percent. The company’s full-year earnings per share guidance was forecast to be between $7.85 and $8.35, in line with expectations of $8.12.

“While there are mixed signals in the political and economic environment, based on what we see in the business we are starting 2019 from a position of strength,” Squeri said on a call with analysts following the report.

The company more than doubled its annual profit from a year ago. American Express brought in in $6.92 billion in for 2018 compared to $2.75 billion in 2017.

Amex earned $2.32 per share in the fourth quarter, a significant improvement from a year ago when it reported a loss of $1.42 per share for the same period. The comparable earnings amount, which excludes a U.S. tax benefit, was $1.74 per share, missing analysts’ estimates of $1.80 cents per share forecast by Refinitiv.

Analysts have been keeping an eye on U.S. consumer spending, which tends to track closely with the performance of credit card companies.

“A macro theme for American Express is the health of the consumer, and we’ve seen pretty good U.S. consumer credit,” Jefferies Managing Director John Hecht told CNBC. “That should portend decent borrowing.”

Nomura and other firms had also been watching something known as “provisions” for losses, the expenses for uncollected customer loans and loan payments. Those costs have been dropping in recent quarters, Carache said. In the fourth quarter, provisions for losses were up 14 percent year over year, which the company said reflected growth in the loan portfolio and higher lending write-off rates.

Citigroup, J. P. Morgan and Bank of America all said in their own quarterly reports this week that they expect consumer credit quality this year to be similar to 2018, Sandler O’Neill & Partners managing director Christopher Donat said. J. P. Morgan CEO Jamie Dimon said on a call with analysts that “consumers are in good shape, they’re spending money.”

Jack Bogle: A ‘hero’ to American investors2 Hours AgoTo view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser. Download the latest Flash player and try again. Jack Bogle, father of the index fund and legendary investor, died Wednesday at age 89.

Along with soft auto sales and dismal manufacturing data, China’s remarkably weak soybean imports add more evidence of a slowdown in the world’s second-largest economy. China, the world’s top soybean consumer, has turned to Brazil and other exporters for its supplies since slapping tariffs on U.S.-origin soybeans. That essentially signals to farmers that they shouldn’t cede too much acreage to other crops at the expense of soybeans, says Smithmier. China is the world’s biggest consumer of soybea

The ongoing U.S.-China trade dispute is now being complicated by an outbreak of African swine flu that threatens to suppress Chinese demand for soy meal, a common hog feed, for months to come. Along with soft auto sales and dismal manufacturing data, China’s remarkably weak soybean imports add more evidence of a slowdown in the world’s second-largest economy.

China, the world’s top soybean consumer, has turned to Brazil and other exporters for its supplies since slapping tariffs on U.S.-origin soybeans. The trade tension has weighed on prices, with soybeans losing more than $2.50 per bushel — roughly a quarter of their value — between the 2017 peak in March and the trough in September.

As Beijing and Washington endeavor to end the dispute, prices have rallied about 80 cents. That essentially signals to farmers that they shouldn’t cede too much acreage to other crops at the expense of soybeans, says Smithmier. However, he believes that’s a false signal and prices will soon correct.

“There has been talk that China has bought up to 5 million tonnes of US soybeans in the last month as trade negotiations take place,” he wrote in a blog post. “This has a nice ring to it, but in our view, these are goodwill purchases for Chinese state-owned storage and nothing more. These trades in no way portray real demand within the country.”

China is the world’s biggest consumer of soybeans, so the faltering imports are a major red flag for demand. Meanwhile, the world’s top three soybean suppliers — the United States, Brazil and Argentina — have all produced sizable crops.

“The last thing you need to add to the difficulty of the trade war is a true demand problem in China, one that is caused by lower demand from feed, not just trade war rhetoric. You have an absolute issue there.”

The Abu Dhabi Future Energy Company, also known as Masdar, has acquired stakes in two U.S. wind farms in what will be its first-ever foray into the North American market. The company, a subsidiary of Emirati investment vehicle Mubadala Development Company, on Tuesday announced its share purchase agreement to buy British developer John Laing Group’s interest in wind farms in Texas and New Mexico. While the exact dollar value of the deal has not been disclosed, Masdar’s leadership described it as

The Abu Dhabi Future Energy Company, also known as Masdar, has acquired stakes in two U.S. wind farms in what will be its first-ever foray into the North American market.

The company, a subsidiary of Emirati investment vehicle Mubadala Development Company, on Tuesday announced its share purchase agreement to buy British developer John Laing Group’s interest in wind farms in Texas and New Mexico. While the exact dollar value of the deal has not been disclosed, Masdar’s leadership described it as being “north of $100 million.”

The 149 megawatt (MW) Rocksprings project in Texas is home to 53 of General Electric’s 2.3MW wind turbines and 16 of its 1.72MW turbines in Val Verde County, while the Sterling project in New Mexico’s Lea County has a total installed capacity of 29.9MW provided by 13 of General Electric’s 2.3MW turbines.

Masdar Chief Executive Mohamed Jameel Al Ramahi spoke to CNBC’s Dan Murphy about the move Tuesday while at Abu Dhabi’s Sustainability Week, calling the U.S. “a very important market not only for Masdar but the renewable energy world.” Last year’s conference by the same name saw $15 billion worth of deals announced.

Indeed, America saw a record 6.3 percent of its electricity generated from wind in 2017, and is home to “one of the largest and fastest-growing wind markets in the world,” according to the U.S. Department of Energy. The country installed over 7,000 MW of wind energy capacity in 2017, according to data from the Global Wind Energy Council, putting it behind only China in terms of new installations.

That may prove problematic for Trump, whose first year in the Oval Office was marked by a plunge in overseas approval ratings. The median global approval rating of the job performance of U.S. leadership across 134 countries stood at a new low of 30 percent, according to a 2018 Gallup report. Trump’s average domestic approval rating — which hovers around 40 percent — is also lackluster when compared with his predecessor’s. “An increase of one percentage point in net (American) leadership approval

That may prove problematic for Trump, whose first year in the Oval Office was marked by a plunge in overseas approval ratings.

The median global approval rating of the job performance of U.S. leadership across 134 countries stood at a new low of 30 percent, according to a 2018 Gallup report. That was down nearly 20 points from the 48 percent approval rating in the last year of President Barack Obama’s administration, and 4 points lower than the previous low of 34 percent in the last year of President George W. Bush’s administration.

Trump’s average domestic approval rating — which hovers around 40 percent — is also lackluster when compared with his predecessor’s.

“An increase of one percentage point in net (American) leadership approval boosts (American) exports by around one one-hundredth of a percent,” Rose wrote. It’s an “economically large effect, given that swings in leadership approval are often over twenty percentage points, as occurred both when Obama succeeded Bush in 2009 or when Trump succeeded Obama in 2017.”

The economist noted that that calculation is conservative if countries that are large importers of American products also disapprove of Trump disproportionately.

The International Monetary Fund data cover bilateral trade between over 200 countries between 1948 and 2017, while Gallup’s rating metrics — a proxy for soft power in this study — provide annual percentages of approval and disapproval.

“The drop in foreign approval for leadership in 2017 compared with the eight previous years is a phenomenon unique to the United States,” the economist wrote, pointing to little changes in foreign perception of German, Chinese and Russian leadership over the past several year.

While North American shale may be competition for OPEC members, some crude-exporting countries in the Arabian Gulf are simultaneously taking advantage of the commodity’s ability to fuel lucrative investments beyond oil. For the United Arab Emirates’ Musabbeh al-Kaabi, chief executive of Abu Dhabi’s Mubadala Petroleum and Petrochemicals, the shale revolution has the made North American gas and petrochemicals industry very attractive, bringing competitively-priced gas feedstock to the market. The

While North American shale may be competition for OPEC members, some crude-exporting countries in the Arabian Gulf are simultaneously taking advantage of the commodity’s ability to fuel lucrative investments beyond oil.

For the United Arab Emirates’ Musabbeh al-Kaabi, chief executive of Abu Dhabi’s Mubadala Petroleum and Petrochemicals, the shale revolution has the made North American gas and petrochemicals industry very attractive, bringing competitively-priced gas feedstock to the market.

The petrochemicals firm is a major component of Mubadala Investment Company, Abu Dhabi’s state-owned holding company. It operates as a sovereign wealth fund with assets of more than $226 billion, and is aimed at diversifying the emirate’s economy.

“We as an investor made big investments in the last 18 months, north of $12 billion dollars, and some of these big investments are happening in North America,” al-Kaabi told CNBC’s Hadley Gamble during the Atlantic Council Energy Forum in Abu Dhabi.

This was for two simple reasons, the CEO said. “It is a big market and it is enjoying a highly competitive feedstock. So we like the business in that part of the world because of these two reasons.” Feedstock refers to raw material, such as natural gas, used in petrochemical production. Gas dominate’s the company’s business, and al-Kaabi has previously highlighted North America as the focus of a strategic shift when it comes to petrochemicals thanks to the shale revolution.

“Other parts of global energy I would say, the energy industry, the price would be set by the high cost producers going forward,” al-Kaabi added. “And who are the high cost producers nowadays? The shale producers. And we will keep monitoring what is happening in that part of the world.”

The Chinese economy is a bigger worry right now than the U.S. economy, according to an investments expert at a private bank. Still, he ultimately expressed optimism that China’s leaders will keep their economy together. “The Chinese economy is, at the moment, a bigger cause of concern right now compared to the U.S. economy,” Brill told CNBC’s “Squawk Box.” Adding the tariff battle between the two largest economies just means growth will be “a bit more difficult” for Beijing, he noted. “This is s

The Chinese economy is a bigger worry right now than the U.S. economy, according to an investments expert at a private bank.

Speaking to CNBC on Friday, Felix Brill, the head of investment solutions at Liechtenstein-based VP Bank, said investors should expect more market volatility due to the ongoing trade war negotiations between Washington and Beijing. Still, he ultimately expressed optimism that China’s leaders will keep their economy together.

“The Chinese economy is, at the moment, a bigger cause of concern right now compared to the U.S. economy,” Brill told CNBC’s “Squawk Box.”

He added that there are “clear signs” that China’s economy is slowing in the short term, and there may be more dragging on the nation as it looks to transition its economic model from one led by exportation to a more consumption-driven approach. Adding the tariff battle between the two largest economies just means growth will be “a bit more difficult” for Beijing, he noted.

But, Brill said, that doesn’t mean China won’t be able to push through those challenges.

“This is some cause for concern in the short term, but I’m confident that the Chinese authorities, again, will step in and implement additional measures to support the economy,” he said.

Chinese consumers are starting to “take sides” as the U.S.-China trade dispute rages on, and that could hamper the success of some U.S. companies, CNBC’s Jim Cramer said Friday. Then, earlier on Friday, Goldman Sachs downgraded the stock of Starbucks, citing “a number of points of caution” in the Chinese market. “We know that the Chinese consumer’s beginning to take sides,” Cramer said on “Mad Money.” But the best ways to gauge trade talk progress in Cramer’s book are what he called “the three A

Chinese consumers are starting to “take sides” as the U.S.-China trade dispute rages on, and that could hamper the success of some U.S. companies, CNBC’s Jim Cramer said Friday.

Perhaps it already is: U.S. tech giant Apple recently warned that its fiscal first-quarter results would miss expectations due to weaker-than-anticipated iPhone sales in China. Then, earlier on Friday, Goldman Sachs downgraded the stock of Starbucks, citing “a number of points of caution” in the Chinese market.

“We know that the Chinese consumer’s beginning to take sides,” Cramer said on “Mad Money.” “That’s not good news for any American companies that do business over there, even if many of their stocks seem to reflect that we might be getting some progress in the trade talks.”

Cramer was referring to shares of apparel companies like Nike, Lululemon and Tapestry, all of which do business in China but have not seen their sales slow in a material way. Stocks of industrials with ties to the People’s Republic, like Boeing and Deere, an agricultural play that should be suffering from tariffs on U.S. crops, are also holding firm.

“I wonder if the action in Deere is signaling that maybe we’ll get some progress in these Chinese trade talks, or, at the very least, they’ll make a bunch of ag[ricultural] purchases as a show of good faith,” the “Mad Money” host wondered.

But the best ways to gauge trade talk progress in Cramer’s book are what he called “the three As”: American Express, Apple and aerospace.

If American Express is able to get a license to operate in China, that will signal that China is ready to embrace the U.S. financial sector, Cramer explained. If the Chinese government “starts making nice” with Apple, that would also be “very positive,” he said, much better than the news of iPhone price slashes in China that made waves Friday.

“But the most important show of good faith would be for China Airlines to place a gigantic order of planes with Boeing, an order that would reverberate throughout the entire aerospace complex, including Honeywell, United Technologies, and GE, … which is finally starting to [trade] like an aerospace and industrial stock again,” Cramer said.

For now, though, the “winners and losers in China” are starting to emerge, and there’s no denying that “the Chinese economy’s gotten pretty tricky here, especially for American companies,” he said.

“Frankly, China’s become unfathomable at the moment. We have no idea [what] their government’s doing, what it’s thinking,” Cramer said. “Maybe it’s darkest before the dawn, but I’d argue it’s ill-advised to predict the dawn until we’re further along into the night.”

Stocks sank in Friday’s trading session as worries about an economic slowdown in China took hold. For a timeline of the trade war and tariff exchanges between U.S. and Chinese trade authorities, click here.